Continental plans to cut or shift up to 13 percent of its workforce to meet its goal of cutting costs by at least 1 billion euros a year,media reported. The company will deepen its restructuring as the new crown virus increases pressure on the automotive industry. Continental said 90 per cent of the restructuring measures, which could affect 30,000 jobs, would be implemented by 2025. Germany’s domestic operations will also be hit hard, with about 13,000 jobs to be moved elsewhere or laid off.
The auto industry is facing its biggest crisis in 70 years, with parts suppliers particularly hard hit, CEO Elmar Degenhart said in a statement Tuesday.
The auto industry is suffering from a new crown outbreak and is under pressure to invest in new technologies as the burning era is over and car-sharing services are eating into demand.
The company aims to meet its new cost borrowing target by 2023. Previously, the company had a reform plan that could affect 20,000 employees before the outbreak.
There are signs that a temporary rebound in car demand is losing momentum. Both France and Spain recorded sales declines in August, erasing gains from previous months.
The mainland has so far been reluctant to provide a full-year outlook, citing market uncertainty. The German car giant said on Tuesday it expected global markets to wait until 2025 to return to 2017 levels.
The German-based company embarked on a far-reaching reform last year when the global economy weakened and car production began to slow. As a result of the pandemic, the initial plan to restore the balance became inadequate.
Continental employs about 232,000 people worldwide, including 59,000 in Germany. The company said the ongoing restructuring affected about 3,000 jobs. The company’s employee representatives expressed anger at the recent layoffs and called for fairer and more balanced measures.
“This is a serious blow,” Hasan Allak, continental’s top labor leader, said in a statement, “and with management failures over the past few years, such as exaggerated growth targets, quality issues and billions of dollars in asset write-downs, a deadly picture emerges.” “